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CITEC International Estates Ltd. v. Edicomisa International Inc. & Ass. [2017] – SC

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➥ CASE SUMMARY OF:
CITEC International Estates Ltd. v. Edicomisa International Inc. & Ass. [2017] – SC

by “PipAr” Branham-Paul C. Chima, SAL.

➥ COURT:
Supreme Court – SC. 163/2006

➥ JUDGEMENT DELIVERED ON:
Fri, 09 June 2017

➥ AREA(S) OF LAW
Carrying on business;
Incorporation of Company;
Unchallenged evidence.

➥ PRINCIPLES OF LAW
⦿ MEANING OF TO CARRY ON BUSINESS IN NIGERIA
The lower court, in my view, got it right when it held at pages 170 -171 of the Record, to wit – “To carry on business means to conduct, prosecute or continue a particular vocation or business as a continuous operation as permanent occupation. The repetition of acts may be sufficient. It also means to hold oneself out to others as engaged in the selling of goods or services. See Black’s Law Dictionary 5th edition p. 194. See Black’s Law Dictionary 5th edition p. 194.” — E. Eko, JSC.

⦿ UNCHALLENGED FINDINGS OF FACT ARE DEEMED TO BE ADMITTED BY A PARTY
The law is trite that a specific finding of fact by a court which is neither challenged nor appealed is deemed to be an acceptable and admitted fact by the party against whom it was made. In this case, this specific finding of fact was made concurrently by the trial court and the lower court. Such findings of fact, as this Court held in BAKARE v. THE STATE (1987) 3 SC 1, are presumed to be correct. The burden of displacing this presumption is on the party challenging the specific finding, as this Respondent purports to do belatedly and without any cross-appeal. The burden, as Agim, JCA, stated in DONATUS OKAFOR v. IFEANYIISIADINSO (2014) LPELR – 14 23013 (CA), is not discharged by a mere assertion that the findings is wrong. — E. Eko, JSC.

⦿ ILLEGALITY OF A CONTRACT IMPACTS THE JURISDICTION OF A COURT
Illegality of a contract or transaction, whenever it is raised as a defence to a claim founded on the said transaction, impacts on the jurisdiction of the court. When the contract on which the plaintiff sues is ex facie illegal, the courts will decline to enforce it for the courts exercise their jurisdiction only to administer the law of the land. They do not exercise their jurisdiction to help the Plaintiff break the law. See GEORGE & ORS v. DOMINION FLOUR MILLS LTD (1963) 1 ALL NLR 71; IBRAHIM v. OSIM (1988) NWLR 257; BARCLAYS BANK D.O.C. v, MEMUNATU HASSAN (1961) ALL NLR 836. — E. Eko, JSC.

➥ LEAD JUDGEMENT DELIVERED BY:
Ejembi Eko, JSC

➥ APPEARANCES
⦿ FOR THE APPELLANT
A.M. Kayode, Esq.

⦿ FOR THE RESPONDENT
F.R. Onoja, Esq;
A.M. Kayode, Esq.

➥ CASE FACT/HISTORY
On 23rd July, 2003, the High Court of the Federal Capital Territory (FCT) presided by Hussein Mukhtar, J, delivered its ruling in the suit No. FCT/HC/CV/405/2003 in the preliminary objection of the defendant in that suit. The learned trial Judge held in the said Ruling inter alia that “the plaintiff company though has the legal capacity to sue and be sued has no parallel capacity to carry on any business in Nigeria until it is so incorporated in Nigeria”.

Against this decision the plaintiff at the trial High Court of the FCT lodged its appeal on 1st August, 2003 to the Court of Appeal (hereinafter referred to as the “lower court”).

The appeal at the lower court was heard and determined on the questions: “whether the company – Edicomsa International, Inc. & Associates, incorporated as a legal entity under the laws of the United States of America, has legal capacity to carry on business in Nigeria and consequently maintain an action in Nigerian Court to enforce its right in the business it carried on in Nigeria”.

The lower court held that a foreign company, not registered to carry on business in Nigeria, can maintain an action to enforce the rights to the business it carried on in Nigeria.

This further appeal by the Defendant at the trial court raises, in my view, the question only of the proper or correct interpretation of the provisions of Sections 54, 55 and 60 of the Companies and Allied Matters Act (CAMA).

Available:  The Young Shall Grow Motors Limited v. Ambros O. Okonkwo & Anor. (2010)

➥ ISSUE(S) & RESOLUTION(S)
[APPEAL ALLOWED]

♎ I. Whether the Respondent’s act of carrying on business in Nigeria is illegal, and the transactions emanating void?

RULING: IN APPELLANT’S FAVOUR.
A. THAT THE RESPONDENT WAS CARRYING ON BUSINESS IN NIGERIA AND ALL ACTS EMANATING THEREFROM IS VOID
“In the instant case the appellant admits in its pleadings that it is a foreign company registered in the United States of America. It did not comply with the Provisions of Section 54(1) of CAMA since it is not incorporated in Nigeria. The appellant executed contract with the respondent wherein it was to build housing units and similar work for the defendant. This falls within the warm embrace of “to carry on business in Nigeria.”

“I agree entirely, on this findings that the plaintiff, the Respondent, herein, is a foreign company carrying on business in Nigeria without being duly registered to do so. The legal consequence is that provided in Section 55 of CAMA. The conduct criminalised by Section 55 of CAMA is what the trial court and the lower court had found the Respondent to have done. The concurrent findings of fact, based on the admission of the Respondent in its pleadings, are unchallenged. The conduct of the Respondent doing or carrying on business in Nigeria without being duly registered is not only criminal by virtue of Section 55 of CAMA, the transaction it entered into with the Appellant, as the defendant, was void by dint of Section 54(2) of CAMA.”

“There is no evidence that the plaintiff/Respondent enjoyed any exemption under Section 54(3) of CAMA. There had been, on the part of the plaintiff/Respondent, an admission that it is a foreign company carrying on business in Nigeria without being registered to do so. The lower court has found, on the admission of the plaintiff/Respondent, that being a foreign company carrying on business in Nigeria without being duly registered under the CAMA to do so “all its acts” or transactions in Nigeria are void. Throughout the judgment of the court below and notwithstanding the trial court’s reliance on it in its decision at page 126 of the record, there was no mention of Section 55 of CAMA and/or its implication on the admission of the plaintiff/Respondent and the lower court’s unchallenged findings of fact that the plaintiff/Respondent, as a foreign company was carrying on business without its being registered to do so. I have no doubt whatsoever, reading Sections 54 and 55 of CAMA together vis-a-vis the conduct of the plaintiff/Respondent that the latters transactions with the defendant/Appellant was criminal and void.”

“The Appellant’s counsel submits, on the authority of SOLANKE v. ABED & ANOR. (1962) 1 ALL NLR 230 at 233, and I agree, that where a statute, as CAMA does, not only declares a contract void, but also imposes penalty for making it, the contract is illegal. The contract, in the instant case, by operation of Sections 54 and 55 of CAMA, was illegal and void ah initio. Thus, as stated by Kutigi, JSC (as he then was) in ALAO v. A.C.B. (supra) and this Court in OYENEYIN v. AKINKUGBE (2010) 4 NWLR (pt.1184) 265 at 285, an illegal act, that is a void act, does not confer any legal right or title whatsoever.”

“Where a foreign company, not registered in Nigeria, purports to carry on business in Nigeria in defiance of Section 54(1) of CAMA, such transaction is not only void, it is illegal and a crime to do so. That is the legislative intent or purpose of Sections 54(2} and 55 of CAMA. In our interpretational responsibility or function, ours is to construe statutory provisions to bring out and promote its purpose. See RABIU v. THE STATE (1980) 8 -11 SC 130. The legislature has enacted Sections 54 and 55 purposely not to allow a foreign company carry on business in Nigeria without being first duly registered in Nigeria in accordance with the provisions of CAMA. That is why the conduct is expressly criminalised by Section 55 of CAMA. Thus any conduct of a foreign company in defiance of Section 54(1) of CAMA renders whatever business it carries on not only void (by S.54(2) of CAMA) it is criminal to do so by virtue of Section 55 of CAMA. The law as put in latinism, ex dolo ma Jo non oritur, is simply that the court of justice will not lend its aid to a man who grounds his cause on illegality. If from the plaintiffs own pleading, his cause of action is founded on illegality or some transgression of the positive law of this country, then, as the trial court stated in its Judgment in this case, he has no right to be assisted by our law courts.”
.
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♎ II. Whether the provisions of Section 60(b) of CAMA is applicable in the circumstances of this appeal and inures to the Respondent?

Available:  People's Democratic Party (PDP) V. Biobarakumo Degi-Eremionyo (SC.1/2020, 13 Feb 2020)

RULING: IN APPELLANT’S FAVOUR.
A. SECTION 60(b) DOES NOT APPLY TO THE RESPONDENT AS IT HAS ALREADY CARRY ON BUSINESS WITHOUT COMPLYING WITH THE CAMA
“While Sections 54 and 55 of CAMA are about the conduct of a foreign company that it is illegal in Nigeria, Section 60 of CAMA on the other hand, permits the enforcement by a foreign company a legal right accruing to it from a lawful business or transaction. Section 60 of CAMA does not vest in a foreign company a legal right to enforce an illegal contract. The situation the legislature has in mind, in enacting Section 60 of CAMA, is where, for instance, a foreign company has had a transaction with a Nigerian or a Nigerian entity which transaction could be enforced in Nigeria but which of course may not have been as a result of any business the foreign company is carrying on in Nigeria. Section 60 of CAMA, no doubt, was enacted to further enhance international trade or commerce. I have, in support of this view, the decision of Ademola, JCA, in NIGERIA BANK FOR COMMERCE & INDUSTRY LTD v. EUROPA TRADERS (UK) LTD (1990) 6 NWLR (pt.154) 36 at page 41; that is –  “In as much as a Nigerian goes to Harrods to buy goods on credit can be sued by Harrods in Nigerian Courts, so also can a British Company from whom a Nigerian has bought goods and has not paid be sued in Nigerian Courts. There is basis for reciprocity in international relations and no nationalistic feelings or thoughts should destroy this fundamental rules of International relations”.   See also RITZ & CO. KG v. TECHNO LTD. (1999) 4 NWLR (pt.598) 298 at 305.”

“The capacity of a foreign company to sue and/or be sued in Nigerian Courts, as a fundamental principle in reciprocity in International relations and mercantile practice is the basis and purpose for enactment of Section 60 of CAMA. That capacity, in my firm view, does not warrant or permit, in view of Section 54 and 60 of CAMA, a foreign company to sue in Nigerian Courts to enforce contracts that are either illegal or expressly criminalised, as the instant, by the positive or express laws of Nigeria. Nigerian courts, I must say, are not established to legalise acts or conducts that are illegalised or criminalized by Parliament or statute. They are also not established to declare as illegal acts or conduct that are by law legal and/or lawful. That will definitely will be a negation of the principle of purposive interpretation or construction of statutes.”

“There are two things here. One is whether the Respondent, as a foreign company, has legal capacity to sue and be sued in Nigerian courts. The other is whether it can enforce an illegal contract? I had earlier in this Judgment made the point that the Respondent, an admitted foreign company, on the basis of reciprocity in International relations has legal capacity to maintain an action in any Nigerian Court to enforce any legitimate contractual right pursuant to Section 60 of CAMA. 1 have also held that a foreign company, as the plaintiff/Respondent, that is not registered in Nigeria cannot carry on business in Nigeria, and that where it carries on Nigeria in defiance of the positive or statutory provisions prohibiting it to do so such contract is illegal. For avoidance of doubt Section 54(2) of CAMA provides that any contract or business transaction carried on in Nigeria by a foreign company, which has not been registered or incorporated in Nigeria to carry on business in Nigeria, is void. Section 55 of CAMA, without ambiguity, provides that a foreign company that carries on business without being so registered does so criminally. Accordingly, such business or contract performed by the foreign company in contravention of the provisions of Section 54(1) & (2) of CAMA is illegal and void.”
.
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♎ III. Was the Court of Appeal right in the circumstance of this case, to hold that the Respondent was not given the opportunity to establish its legal capacity or status by the trial court?

Available:  Moses Benjamin v Adokiye Kalio (2017) - SC

RULING: IN APPELLANT’S FAVOUR.
A. THE PLAINTIFF/RESPONDENT WAS GIVEN THE OPPORTUNITY TO PROVE ITS INCORPORATION
“Clearly on the state of pleadings and other facts it does not lie in the mouth of the plaintiff/Respondent to say that it was not given an opportunity to prove that it was registered or incorporated in Nigeria to carry on business in Nigeria in compliance with Section 54(1) of the CAMA. It is only by such positive averment or evidence that it can raise and establish its defence to the Preliminary Objection. The learned counsel to the Appellant submits, and I agree, that the only way incorporation of a company can be established in any proceedings is by tendering the certificate of its incorporation. See LUTIN v. NNPC (2006) 2 NWLR (pt.965) 506 at 533.”

“On the state of pleadings an issue was raised that the plaintiff, a foreign company, having not been registered or incorporated in Nigeria to carry on business in Nigeria, could not legally carry on business in Nigeria with the defendant/Appellant, and that “the contract purportedly giving rise to the cause of action illegal and void. That should be enough notice, for purposes of audi alteram partem, to the Plaintiff to prove that it, in doing business with the defendant/Appellant in Nigeria it had, as a foreign company, complied with the provisions of Section 54(1) of CAMA, in order to avoid the harsh consequences of Sections 54(2) and 55 of CAMA. The plaintiff did not file any reply pleading to join issues with the defendant/Appellant on this very major challenge to the enforceability of the contract it purportedly entered into with the defendant/Appellant. The Respondent, as the plaintiff, still missed the opportunity it had to establish that it was registered or incorporated in Nigeria, in compliance with Section 54(1) of CAMA to carry on business in Nigeria as a foreign company, when it failed to file counter-affidavit to controvert or challenge the averment in the affidavit in support of the Preliminary Objection alleging that it was ‘not incorporated in Nigeria’.”
.
.
.
✓ DECISION:
“The appeal is allowed. The Judgment of the lower court delivered on 8th December, 2005, in the appeal No. CA/A/175/2003 is hereby set aside. In its stead the decision of the High Court of the Federal Capital Territory delivered on 23rd July, 2003 in the suit No. FCT/CV/405/2003 is hereby restored and affirmed.”

➥ MISCELLANEOUS POINTS

➥ REFERENCED (CASE)
⦿ WHEN IS A CONTRACT SAID TO BE ILLEGAL
In ALAO v. A.C.B. LTD. (1998) 1 – 2 SC 179; (1998) 3 NWLR (pt.542) 339; per Kutigi, JSC (as he then was) stated at page 355 thus: “The law is very clear on the effect of illegality on a transaction or contract. It is the law that a contract is illegal if the consideration or the promise involves doing something illegal or contrary to public policy or if the intention of the parties in making the contract is hereby to promote something which is illegal or contrary to public policy. An illegal contract is a void contract and it cannot be the foundation of any legal right. In other words, when the object of either the promise or the consideration is to promote the committal of an illegal act, the contract itself is illegal and cannot be enforced (See HERMAN v. JEUCHNER (1888) is QBD 561; WILLIAM HILL (PARK LANE) LTD. v. HOFMAN (1950) 1 ALL ER 1013; CHIEF ONYIUKE III v. OKEKE (1976) 1 ALL NLR (pt.) 181; SODIPO v. LEMMINKAINEN OY (NO.2) 1986 1 NWLR (pt.l5) 220)”.

➥ REFERENCED (OTHERS)

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